Every once in awhile I catch myself in a bad habit. They almost seem inevitable. But I’m always determined to squash them as soon as I recognize them. I’m sure you’re in the same boat.

When it comes to bad financial habits, there are some serious ones that can cost you thousands of dollars. Which of these habits are you guilty of committing?

1. Spending With Credit Cards When You Can’t Afford It

Credit card interest rates are regularly well above 10%. That translates into a lot of interest charges if you don’t pay off your credit card every month. Worse yet, many people get stuck in a cycle of credit card debt – a habit that seems to just not go away.

Many people make what they consider to be “educated” guesses as to whether they can afford to put new clothes or high-tech gadgets on their credit cards. The problem is that those who do often don’t really know their future expenses.

If you’re living paycheck to paycheck, even small emergency expenses can be enough to make you late on your credit card payments. And if you’re late once, it’s so easy to push off paying your credit card debt until you’re really hurting. Furthermore, late payments can hurt your credit, and if your credit score drops low enough it can mean higher interest rates for you in the future. (You can see how your credit card debt is affecting your credit by getting your credit scores for free on Credit.com.)

Unless you’re entirely sure you can pay off your credit cards every month, you may want to seriously consider not using them.

You may be asking, “Hey Jeff, I’m not sure how to stop using credit cards – I can’t afford to live without them!”

That’s a difficult situation, no doubt. In that case, you’re going to have to look at both your income and expenses to determine where you can make improvements so you don’t have to depend on credit to make ends meet.

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2. Not Tracking Your Transactions With a Budget

One of the best advantages of tracking your transactions is that you can see very clearly where you spent your money over time.

Try tracking your spending for a month (there are free budgeting software programs that can help with that, too). If you haven’t ever given a second thought to spending, this exercise will certainly help you do that.

When the month is over, categorize and add up your expenses. Many people overspend on the following categories:

Groceries

Clothing

Entertainment

Eating Out

These are categories you should monitor carefully.

Once you know how much you’re spending in your categories, make a few goals. Try lowering how much you’re allowed to spend in your problem categories incrementally, month by month.

Over time, because you’ve been tracking your categories and paying attention to your spending habits, you’ll find you can lower your budget category allocations – saving you thousands of dollars.

3. Waking Up Late

All of us are pressed for time. If you’re like many out there, you dread the alarm clock and reach for the snooze button too many times (that is, more than zero times).

But I bet there’s something you’d love to do if only you had more hours in the day. Maybe you’d exercise, start a side business, or take some online classes. These are all activities that can either directly or indirectly result in more income.

For example, if you take some online classes, you can learn a useful and marketable skill that can earn you a raise, promotion or a better job.

Personally, I found that by waking up early I can have a few morning routines that get me pumped for my day ahead. The later I wake up, the less productive I feel, and the less productive I am.

You can also fill those early morning hours with some of those activities you always wanted to get to but never could. You just might find that even if you don’t consider yourself to be a morning person, you could become one.

Instead of focusing on ways to improve your finances through just financial means, look at your entire life – it’s not as compartmentalized as it may seem and can have profound consequences on your money.

4. Consuming to Hopefully Find Contentment

Something deep down in me cringes when I hear businesses call people “consumers.” Sure, people consume, but that’s not all they do. But maybe businesses sometimes refer to people as consumers because that’s what so many do too often: they consume.

Ask yourself if you consume more than you produce. Is your goal in the morning to wake up and say, “I wonder how I can please myself today?” Or, is your goal to serve others?

Albert Einstein was quoted in the June 20, 1932 New York Times as saying: “Only a life lived for others is the life worth while.” There’s so much wisdom to that.

But there are other benefits to serving others above ourselves, as well. Have you noticed that when you’re busy serving others and making money, you spend less? Perhaps you’ve noticed the reverse.

Don’t consume to seek contentment. Contentment isn’t found in consumption, it’s found in servanthood. Follow this advice, and you’ll likely keep more cash in your wallet, too.

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5. Using Investment Accounts as Emergency Funds

It happens from time to time. I’ve seen a few of my clients raid their investment accounts to pay for emergencies. Sometimes, it even becomes habitual. I understand why they do it, but the tax penalties can be high.

Also, if you use your investment accounts as emergency funds, you’ll lose all that potential earning power when you have to dip into it for emergencies.

A better plan is to have a high-yield savings account nicknamed “emergency fund” and not touch it unless there’s a true emergency. And don’t fool yourself, you really do need an emergency fund.

There are a whole host of emergencies that can crop up when you least expect it: lawsuits, medical bills, job loss, the list goes on and on.

Here’s one habit you should get into: taking extra money you’ve earned every month and pouring it into your emergency fund. You may even put monetary gifts you’ve received into your emergency fund until you’ve filled it up (I recommend three to eight months’ worth of expenses).

Say Hello to More Money

Bad financial habits aren’t always easy to correct. I’ll be honest with you, it’s often very difficult. It requires a shift in the way you think about money.

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